BPCL – A steady decline

Bharat Petroleum Corporation Limited (BPCL) is an Indian central public sector undertaking which is currently under the ownership of Government of India through the Ministry of Petroleum and Natural Gas. BPCL is India’s 2nd largest downstream oil producer and their operations are controlled by the Ministry. The company operates on 3 refineries which are present in Mumbai, Kochi and Bina.

BPCL has reported their Revenue from Operations of Rs 1,28,332 Cr for Q2FY23 compared to Rs 1,01,889. Cr in the same quarter of the previous year.

The Revenue from Operations for the H1FY23 which is from April to September 2022 was Rs 2,66,722 Cr as compared to Rs 1,91,577 Cr for first half period of the previous year.

BPCL reported a net loss for the second quarter of the fiscal year FY 22-23 at Rs -338 Cr as compared to the restated profit of Rs 3,201 Cr in the corresponding quarter of FY22.

Bharat Gas Resources Limited and Bina refinery (previously known as Bharat Oman Refineries Limited) has been amalgamated with BPCL and the financial performance of Bina refinery has been included in BPCL. Corresponding to these mergers, the accounts have been restated for respective periods.

Company’s gross refining margins (GRM) for the period of H1 FY23 was $22.30/bbl as compared to $5.23/bbl in the corresponding comparative period.

EBITDA for Q2 FY23 is positive of Rs 1,991 Cr as compared to Rs 5,654.80 Cr in Q2 FY22. EBITDA margin was at 1.55% in Q2 FY23 as compared to 5.55% in Q2 FY22.

In Q2 FY23, the throughput was at 8.82 MMT as compared to 8.97 MMT in Q2 FY22.
Market Sales were at 11.44 MMT in Q2 FY23 as compared to 9.91 MMT in Q2 FY22. Sales have grown by 15.44%.

BPCL has achieved Average Ethanol Blending percentage of 9.87% during H1 FY23. BPCL added 226 New Fuel Stations in Q2FY23 (388 in H1 FY23), which takes their total network strength to 20443.

BPCL expanded its FINO financial services to 12977 Fuel Stations as of 30th Sep 2022.

BPCL has commissioned new 45 CNG Stations in Q2FY23 (66 in H1FY23) taking the total CNG stations to 1198 as of 30th Sep 2022.

Technical Analysis

BPCL Weekly Candlestick Chart on Sharekhan’s TradeTiger

BPCL has become oversold as the price has returned into its accumulation zone. If we look at the chart, BPCL has been consolidated in the range between 280 to 550. Investors often pick up this stock as it gives high dividends but the return on capital for this stock over the past 5 years is very poor. MFI is at 38 points which also shows us that the stock is oversold. Investing into a petroleum business does not seem attractive for the automobile industry, because in the long term there is an immense potential for growth in Electric Vehicles and Hydrogen powered vehicles.

Disclaimer: We do not endorse or encourage you to take trades or investment decisions based upon our posts/research, all of your trading and investment activities are your own and should be taken through consultation with reputed financial advisors. The analysis posted on this website has been created by involving multiple mediums which are present over the Internet.

Leave a Reply